Credibility of the Russian Stabilisation Programme in 1995-98
This paper investigates the price stabilisation process under the policy commitment to an exchange rate based programme. I develop a formal model which allows to quantify the credibility role in the price stabilisation process and assess the extent to which the economic fundamentals can affect the reputation of policymakers. I decompose devaluation expectations into a probability that authorities are not precommitted with certainty to preannounced policy and a probability that worsened economic fundamentals force authorities to renege on the chosen fixed exchange rate policy. The model is then estimated using Russian data for the IMF stabilisation programme, preceding the rouble collapse in August 1998. I find that past fundamentals and reputation are significant determinants of the devaluation expectations of the forward-looking private sector; the disinflation in Russia was fast partly because it was credible.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||Jan 2002|
|Date of revision:|
|Contact details of provider:|| Postal: 2 Dean Trench Street Smith Square London SW1P 3HE|
Web page: http://niesr.ac.uk
When requesting a correction, please mention this item's handle: RePEc:nsr:niesrd:149. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Library & Information Manager)
If references are entirely missing, you can add them using this form.